Time Magazine has published an article that I feel should be read by everyone. Though the article discusses Unemployment in General becoming much worse over the next 12-18 months…. it lays out the problem in a clear format.. Basically if you look at this article from an Ad Agency perspective there are too many people doing media buys , print and TV ads… and not enough SEO, SEM and Social Media individuals employed at the Ad Agencies. Hence the reasons the layoffs will be permanent.
If you really think of it 1 person using Google Adwords can do 95% of the media buys that a staff of 300 would be doing at a BDA or better said in our opinion Enfatico needs less than 100 people, not 1000 people for Dell’s account if they ran efficiently.
“This doesn’t seem like a simple cyclical shift in unemployment,” says Thomas Lam, an economist who tracks the U.S. economy at the Singapore-based United Overseas Bank. “What we are seeing is a structural problem in the U.S. economy, and that means it will take a lot longer for the unemployed to find jobs.”
The underlying problem is something called misallocation of human capital. It’s a fancy term for the idea that in the past few decades the U.S. may have been producing too many MBAs and not enough RNs.
Again, the article does not state Advertising Agencies… but the parallels are amazing..